There was a recent news article on Fortune that talked about a customer’s experience with a Samsung phone. Apparently, the phone caught on fire while charging.
Customer Richard Wygand then posted a YouTube video commenting on the incident. http://www.youtube.com/watch?v=2QHd-_qncEU&feature=youtu.be
He was subsequently offered a resolution for his new phone subject to a “gag” order and demanded removal of the video. You can read the article here. http://tech.fortune.cnn.com/2013/12/10/apple-samsung-warranty-fire/
We’ve heard from various people, that Apple takes great care of their customers, often offering a new replacement device on the spot and even providing support after the manufacturer warranty has expired. When the Apple phone had a problem with an aftermarket charger, they offered a Take Back Program.
So far, Samsung’s reaction has made his experience worse as noted by Wygand.
Why the difference? Cultural is one thing, no doubt. Apple has always been about the customer experience with Samsung playing catch up.
But we also see that from a business stand point, margins play a big factor in how things are done. Companies with good margins like Apple can afford better customer service. Companies with tighter margins have to find ways to cut corners, and service is usually one area.
Lackluster service can result in bad reviews and posts like that Wygand. With messaging being so instant and accessible with technology, companies can’t afford to slip.
Providing a lower cost device with great features is a strategy to gain customers that works well, but lower margins means reduced costs have to come from somewhere. High margin companies come well-armed to fight the competition and can afford to provide a wow experience. Apple chooses to invest back into the customer experience, which is one reason why it is such a beloved brand name.
Companies that use technology to scale can also provide great service. Reduced overhead can mean lower priced products that can still be supported with service. This is exactly how Web 1.0 started, provide a lower priced product with great service and they will come. Amazon.com is an example of this.
Even companies that struggle in a tough environment can still provide good service because they know they have to. Best Buy is a good example of that. Without it, they’d be worse off. Best Buy is still in a tough spot, but we’ll save that for a later article.
We need competition to keep things honest; it’s often a decision amongst them as to where they choose to allocate their resources. Selling higher margin products certainly helps.